Western Plains Resources has struck a $45 million deal for Chinese steel group Wuhan Iron & Steel (WISCO) to earn a 50 per cent interest in its Hawks Nest magnetite deposits near Coober Pedy in South Australia.
WISCO has agreed to sole fund a minimum commitment of $25 million to earn the half-share, with the funds earmarked for a bankable feasibility study into the development of Hawks Nest, potentially the producer of 10 million tonnes of magnetite concentrates a year.
If additional exploration or feasibility study work is required, or if the parties agree to commit to project development without further exploration or feasibility studies, WISCO will sole fund the next $20 million without increasing its half-share of the project.
The deal has been structured in a way to ease the task of securing clearance from the Foreign Investment Review Board and the Defence Department, with the latter required because Hawks Nest sits on the Woomera rocket range.
Western Plains must always hold at least 50 per cent of the project.
Source: Melbourne Age
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